How to Secure your Business’ Financial Future Amid Covid-19: Interviews with the Experts
This is a scary time for everyone. Covid-19 is taking lives, shutting down businesses and threatening daily life for Americans. There is no playbook for this. We asked Jen Smith, a contributor to our soon to be launched Finsplaining personal finance site and finance expert to get real with us about business, which is always personal. Here’s some tips on how to navigate your business financials during this turbulent time. (As a caveat, always consult with your accountants and financial advisors before enacting any new financial measures.)
AC: Jen, thank you for taking the time to speak with us about how businesses (large and small) should be navigating the choppy waters during Covid-19. What would you say are the first steps businesses should take today to mitigate the risks to their companies borne from Coronavirus?
JS: The first step would be to pivot as much as possible to protect themselves while still adding value to customers during this time. Also, be sure to really tighten up expenses and be as frugal as possible right now.
For smaller businesses, it’s also effective to be strategic with your marketing ad spend. Ensure that all ads are relevant to the times now (and aren’t tone deaf) and take advantage of lower costs. Make sure you niche down hard on your target audience and where your ad placement is running so you’re reaching your demographics where they are looking. Also, look at products that you use for convenience (not value) and see what you can give up now for the time being (then reassess in 6-9 months).
For larger businesses, the companies that are doing well right now might be decreasing revenue in the short term but are preserving their reputation and standing out. An example of this is Shake Shack. They received funds from the Paycheck Protection Program and are giving them back to the government so they can be shared with smaller businesses that need it more. Protect your image and come out as a good guy. Eventually people will get tired of ads that are disingenuous and will want to see money and employee protection put behind glitzy “Thank Yous.” If large brands can put their money to help employees, that will resonate more and be more powerful.
AC: What steps should companies take today to best position themselves to most profitably serve their customers as these shifts are happening?
JS: We’ve seen a lot of businesses shift online out of necessity so now it’s important to refine user experience and make sure their customers’ site journey is seamless. Stay on top of market trends and think about how you can get your customers to the products they need quickly. Smaller businesses can create sales funnels that serve their wider audiences and make sure their customers can get to the products they need. For larger businesses, be sure you’re clear on your “Why” and be genuine with your marketing. But also make sure you have products that are ready to be shipped and you are transparent with any supply chain issues because your customers will want to know.
AC: There will be a time when this is all over and we go back to some semblance of normal life. As we think about “recovery,” what big opportunities could exist for companies at that time?
JS: I think the biggest thing is meeting your customers where they are. When people go back to work, it’s not a “flip the switch back to the type of marketing you were doing before Covid started.” You’re going to have to go on this journey with your customers and put yourself in their shoes. Figure out what they are wanting and pivot in the products and services that you are offering. Try new things and be nimble, like we’ve learned to be at this time. We will have to continue to be flexible for the next 6-9 months and through this forced creativity, brands might open opportunities that didn’t exist before because previously they were operating under a “if it’s not broke, don’t fix it” mentality. Now is the time to reset and innovate.
AC: Many companies are allowing remote work for the first time ever. What do you think the implications of this will be in the future? Will companies move towards more of a remote model because it’s been proven effective? What do you think will be the lasting effects of this time?
JS: I think time will tell. There are some people that can’t wait to get back into physical offices, while others are really enjoying the flexibility that remote work provides. I do hope that it will cut down on endless meetings that are filler and unnecessary because now everyone sees that these in person meetings can be done virtually or over email. There are still a lot of employees that love going into offices but hopefully this will allow for more flex work time because company leaders now know their teams can be trusted to work remote...even in the midst of a pandemic.
AC: What are the three things businesses (large and small) can be doing now to survive this time of uncertainty?
- Keep morale high. Make sure you’re still connecting socially with co-workers and keeping everyone aligned.
- Larger companies have the resources to offer free education through webinars and this keeps everyone learning and growing during this time. Webinars can also familiarize new people with your brand and what you stand for if you’re offering value.
- Foster brand recognition and show you really care. Smaller B2C companies can really get creative since they don’t have a large infrastructure so they’re able to be more nimble and think through how their business can evolve. Think, “how can I position myself now to be where I want to be in 10 years?” Consider this a reset period where you can reinvent yourself and make sure you’re providing the value that you believe in.
AC: A national small business survey said that, “77% of small businesses are very worried about the economic impact of Covid-19.” What loan options are out there right now for small businesses now that the Paycheck Protection Program is tapped out? Are there stipulations they should consider?
JS: What I’m seeing a lot of are grants and loans offered from local governments and local private organizations and they are most accessible. If you live in a city or county where this is offered, then see what’s available locally.
AC: That same survey of business owners said that 54% expect the US to fall into a recession within the next 12 months. What are your thoughts on that? How can businesses try to stay recession-proof?
JS: My motto has been, “Prepare for the worst and hope for the best” both in business and in life. We can anticipate Covid-19 going on in some capacity for the rest of the year but you can protect yourself from the consequences of a recession by relying on creativity and out-of-the-box thinking. For example, on my website, I started making YouTube videos since people at home have more time to watch videos now. It’s about stepping outside your comfort zone to meet the market where they are.
Think about what new businesses and ideas came out during the last recession we had in 2008. For example, Groupon is a company on this list that was really born out of recession. It was attractive in two ways. It offered deals on restaurants to cash-strapped consumers who needed to eat and wanted to get out of the house and it offered an affordable marketing service for restaurants.
On the product side, Apple was suffering after the dot com recession in 2001 and it redirected creatively while staying within its niche. And because of this, the iPod was born. The iPod didn’t rely on the internet, which many people didn’t trust at that moment, and it could hold thousands of songs which translated to a great value even though it wasn’t cheap.
Now is the time to think about what ideas and companies can and will be borne from this crisis that will truly help people and provide products and services of value. Review the data in your industry over the last ten years to see how companies pivoted. Use technology we have now to your advantage and think about how you can evolve.
AC: Any final pieces of advice or information that businesses should be thinking about at this time and beyond?
JS: Try to be helpful and empathetic but know what you and your products are worth.
Don’t just give your products or services away for free because it will cheapen your brand. Know your worth but figure out how to best market that to your audience because they now have different needs.
For example, I have changed the direction of my content, which used to aim to help people get out of debt, to now help them survive this time even if debts have to be on the backburner for a little while.
Most importantly, don’t let fear drive your financial decisions. You know your audience and what will resonate with them at this time and in a post-Covid world.
Have questions for Jen or want to chat? Get in touch.